Cells with multidrug resistance (MDR) due to aberrant expression of the lipid transporter P-glycoprotein (P-gp) display a wide range of biochemical changes that affect membrane lipid composition. Despite significant clinical effort, no effective therapy currently exists to reverse P-gp mediated MDR in human cancers. Recently we discovered that distinct MDR cells exhibit constitutive activation of the de novo pathway of ceramide synthesis as a result of enhanced serine palmitoyltransferase activity, resulting in increased ceramide content (1.7-1.9 fold) and sphingomyelin levels (2-3 fold). Evaluation of the mechanism of daunorubicin resistance in sphingolipid-disordered ADX cells revealed that drug traffics to the nucleus of daunorubicin-sensitive parental DC-3F cells, whereas it mislocalizes into large cytoplasmic vacuoles in ADX MDR cells. Furthermore application of small amounts of exogenous acid sphingomyelinase to generate endogenous ceramide, or provision of exogenous long-chain natural C16-ceramide, result in rapid translocation of vacuolar daunorubicin into the nucleus (within minutes), and 25-fold enhanced cell kill. We posit that MDR chemoresistance results in part from failure to generate the fusogenic lipid ceramide in a vesicular trafficking system that normally transports daunorubicin into the nucleus, reversible by exogenous ceramide. Natural ceramides are categorized into long chain (C16:0-C20:0) and very long chain (C22:0-C24:1) species relative to the length of the N-acylated fatty acid at the second position of the sphingosine backbone. We recently showed that different ceramide species possess distinct biologic attributes with long chain C16:0 ceramide being pro-apoptotic, while very long chain C24:0, C24:1 ceramides are anti-apoptotic. We now show that inclusion of C16:0 ceramide, but no other natural ceramide species, in a nano-liposomal preparation permits rapid translocation of daunorubicin from cytoplasmic vesicles to the nucleus of ADX MDR cells. Based on these data we initiated a collaboration with Chezy Barenholz, who engineered Doxil, the first successful liposomal drug that delivers doxorubicin systemically to tumors. Patent protection for Doxil has recently expired. The overall purpose of this application is to set the groundwork for the development of C16-ceramide Doxil-like liposomes for cancer therapy through three specific in vitro and in vivo aims. Successful completion of these studies will resul in a direct path of drug development as Chezy Barenholz has agreed in principle to generate C16-ceramide/daunorubicin liposomes for the clinic in collaboration with Memorial Sloan-Kettering Cancer Center.